Did Trump’s Deal with Dems Destroy the Chances for Tax Reform?

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Why did President Trump do it? Republicans in particular were left scratching their heads -- or steaming mad -- by the president’s agreement with Democrats Wednesday for a three-month extension of the debt ceiling and a short-term spending bill, both tied to Hurricane Harvey relief funding.

Treasury Secretary Steven Mnuchin, House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell have all essentially said that Trump wanted to ensure that disaster funding would be available and avoid a partisan fight at a time when Houston is recovering from Hurricane Harvey and Florida is battening down in preparation for another major storm.

"He wanted to have a bipartisan response and not a food fight on the timing of the debt limit attached to this bill," Ryan said at a New York Times event Thursday morning. "That's what I believe his motivation was."

The administration has also suggested that the deal would help get tax reform done this year. Mnuchin told Fox Business that the short-term deal, which he reportedly opposed during Trump’s meeting with congressional leaders Wednesday, would do just that. “The best part about this,” he said, “is this clears out the next 90 days for us to focus on important things. So we have the funding for Harvey. We’re focused on tax reform. That’s going to be the big priority for the next 90 days.”

But the agreement also means Congress will be juggling a lot of other balls in the final weeks of the year, including raising the debt ceiling again, averting a partial government shutdown, possible action on DACA and immigration, and further disaster relief for those devastated by Harvey and Irma. Congressional Democrats, emboldened by the deal, could threaten to withhold their votes on another debt ceiling hike unless Republicans give ground on DACA or the tax plan. And congressional Republicans who feel betrayed by Trump may see less reason to line up in support of a plan if they aren’t getting exactly what they want.

"It doesn’t help our leadership to try to hold us Republicans together on anything when they know the president will chop them off at the knees,” one House Republican ally of Ryan’s told Politico.

Rep. Mark Meadows, chairman of the House Freedom Caucus, suggested one way tax reform might still happen this year, according to The Hill: It needs to happen “by Thanksgiving.” If a tax bill does land in the middle of December, Meadows acknowledged, “it becomes more difficult.”

As editor in chief, Yuval Rosenberg oversees all aspects of The Fiscal Times' website and email newsletter. His writing has appeared in publications including BusinessWeek, CNBC.com, CNNMoney.com, Fast Company, Fortune, Newsweek, Money and Time.